Bitcoin v Altcoins for remainder of 2017

Good day fellow crytocurrency playerz.

Perhaps, like me, you have dedicated some think-time to the likely price movements of Bitcoin and altcoins (and in my case in particular privacy oriented coins) since Bitcoin has scaled with Segwit and a promise for 2X blocksizes that may or may not be fulfilled.

If you follow my previous posts, you'll see that for a couple of months I was negative regarding the performance of a number of altcoins in the lead up to Bitcoin's Segwit scaling. If you can be bothered tracing back these posts, you'll see that I was heaviily criticised by the holders of these altcoins for which I predicted underperformance relative to Bitcoin. In the end, I was right that their particular altcoins would underperform Bitcoin, but that is besides the point.

What I want to discuss now is the likely performance of Bitcoin, altcoins generally, and privacy altcoins in particular for the rest of 2017 now that Bitcoin has scaled with Segwit (and double blocksize is at least promised at this point). In particular, I want to discuss major altcoins Ether, Dash, and privacy oriented altcoins Monero, Zcash and ZenCash.

Firstly, in the short term being the remainder of this year, I DO NOT expect Bitcoin to substantially outperform altcoins.
I expect both Bitcoin and altcoins to rise in price substantially for the rest of 2017, but to do so to a roughly similar degree. While it is not my base case scenario, I think it is just as likely that altcoins as a whole will outperform Bitcoin as it is the other way around. Of the altcoins discussed in this post, I view Dash and ZenCash as being least vulnerable to downside risks. While my base case scenario is not for them to lose value over the remainder of the year, I see Ethereum, Zcash and Monero as each being vulnerable to foreseeable downside risks.

Let me explain my reasoning, and please remember that for none of these coins am I predicting substantial price declines. Rather I'm offering suggestions as to their likely performance relative to each other and relative to the market. The "market" I refer to is straightforward - it is the cryptocurrency market as described and valued on coinmarketcap.com

My personal belief is that Bitcoin will rise overall for the remainder of the year with more upside risk than downside risk. Recent events, for instance the Chinese ICO ban, or the as yet unconfirmed news of China banning Bitcoin exchanges reinforced this for me. Both items of news were very significant bad news (although the ban is unconfirmed), but all that could do was drop Bitcoin 20 per cent, and back it came roaring again recovering about 10 of that 20 per cent.

Fundamentally I just see new money flowing into Bitcoin for the remainder of the year, and I expect it to soak up any bad news that emerges, and ultimately lead to a higher Bitcoin price.

Ethereum I believe has both more upside and more downside potential than Bitcoin. Given how high risk and volatile a play the cryptocurrency market is, I personally don't see the benefit in choosing a higher risk asset within the space (Ethereum) over a lower risk asset within the space (Bitcoin) notwithstanding the lower risk asset has less upside potential as well as downside.

I would not choose to hold Zcash or Monero at this stage. Zcash has underperformed Bitcoin even since July when Segwit 2X came into force. All the other altcoins I discuss in this post besides Zcash have gone up or pretty much sideways relative to Bitcoin since July. I think the market is less enthusiastic about Zcash than other coins at this point, and I think one of the reasons for this is that Zcash already rose so quickly this year, and I do not expect it to outperform for the rest of this year.

With regards to Monero, despite having mined it significantly, I have always had great reservations about the coin, and always mined and sold. In fact one of the weaknesses I see in Monero in the short term is that I believe many miners have a similar lack of faith in the coin as I as a miner had. To me this both puts downward pressure on upward price swings, and tends to make Monero drop more sharply than the market as a whole when the market declines. My fundamental lack of faith in Monero though is my belief that it is simply not scaleable and therefore does not have the upside that other privacy coins that can be shown to scale could have. There were short term opportunities with Monero, like the recent 2x plus rise on the news Bithumb was listing Monero, but to my mind these are short term plays, and such trades tend not to fit with my investment style and model.

Which brings me to Dash and ZenCash. While Dash is not per-se a privacy coin anymore, it has a privacy enhancing feature called DarkSend. I like the look of Dash for the remainder of this year. It is very well governed, and continues on with its Evolution upgrade to bring crypto to the masses. Of course, that may seem like a blue-sky dream, but Dash's governance structure has produced results with upgrade campaigns in the past, and I believe they're as or more equipped than any other development team to drink from the Holy Grail of mass adoption of cryptocurrency, so to speak. Dash's Masternode system locks a lot of supply into highly-invested masternode operators, and this tends to mean Dash often declines less rapidly than the market when the market has a very bad day. I do not own Dash at this point but I will be buying sometime before the end of October.

Finally, the privacy oriented coin ZenCash makes a lot of sense to me when considering the balances of upside risk and downside risk. ZenCash derived much of its original sourcecode from Zcash, but it made changes, including a Secure Node system to further enhance privacy. As ZenCash's development rolls out, I see it having the a substantial possibility of outperforming the market for the rest of this year, in contrast to Zcash. This is because ZenCash is currently at a very low marketcap, roughly $17 million to Zcash's $475 million. If you compare Bitcoin Cash to Bitcoin, it has traded up and down, but Bitcoin Cash is somewhere around 13+ per cent of Bitcoin's value, you can see how low a multiple of ZenCash is trading relative to Zcash.

I see ZenCash increasing its value as a percentage of Zcash's value this year. I see it equaling or outperforming the market as a whole. Upside risks are successful rollout of Secure Nodes, and if ZenCash can get included in a mobile multi-coin wallet like Coinomi or another. At the moment the only downside risk I see to ZenCash is general market risk, that is it will go down with the cryptocurrency market if the overall market goes down.

Well, those were my six pence, and you can keep the change kind sirs (and ladies).